Australian firms are pessimistic, with business remaining brisk in November

Businesses in Australia posted a pessimistic outlook on their earnings for the first time in a year. This is caused by growing fears of soaring inflation and higher interest rates in the country. These factors are likely to hurt consumer spending in the short term.

Tuesday's survey by National Australia Bank Ltd (NAB) revealed that the index of current business conditions fell 2 points in November, hitting +20. But it is still above the long-term average. 

In contrast, the measure of confidence slipped by 4 points to -4, turning negative for the first time since December 2021. The difference between the indexes is now the greatest since the COVID-19 pandemic started. 

NAB's chief expert Alan Oster said that customers continue to shop in the run-up to Christmas. So, the economy showed growth in November. But the outlook for Australian enterprises is getting more and more pessimistic. Soaring inflation and higher interest rates are putting pressure on households. Therefore, global economic growth is expected to slow, coupled with a decline in consumption in Australia.